There is a Hotel In mumbai. The tax structure of the hotel are as follow
Billing are as follow
| This is a Room Revenue | ||
| Food Items | 22,000.00 | |
| Beverages | 18,000.00 | |
| 40,000.00 | ||
| Add : | Service Charge @ 5% Levied by Hotel Policy (Whole amt of Service Charge distributed to employees | 2,000.00 |
| Net / Basic Amt | 42,000.00 | |
| Add : | VAT @ 12.5% | 5,250.00 |
| Add : | Service Tax @ 7.416 % | 3,116.40 |
| Final Bill | 50,366.40 |
My question is that here VAT and Service tax is levied on 5% Service Charge Amt, is it correct or wrong ???????
CAclubindia
